Finansbank Overview with Financial Results Investor Relations May 2013
Index NBG Group Finansbank overview Financials Macroeconomic indicators 1
The NBG Group Corporate information National Bank of Greece, the oldest Greek commercial bank, heads the largest and strongest financial group in Greece The Bank has 511 domestic branches and 1,184 banking units overseas. The Group boasts by far the largest network for the distribution of financial products and services in Greece. Overseas, the NBG Group is active in 12 countries, controls 9 banks and 58 companies (as of 2012) The NBG Group is the first Greek financial group to successfully float its stock on the New York Stock Exchange, the world's principal capital market Ratings (16.05.2013) and shareholder structure (31.12.2012) Long-term Short-term Financial strength/ Viability Moody s Caa2 NP E S&P CCC C Fitch B- B b- Domestic investors Other 54.4% 16.4% 5.6% Greek pension funds 23.6% International investors 2
Index NBG Group Finansbank overview Financials Macroeconomic indicators 3
At a glance Ratings and shareholder structure Foreign currency Long-term Short-term Moody s Ba2 NP Fitch BBB- F3 CI BB+ B NBG Group 94.81% International Finance Corp. 5.00% Public 0.19% Corporate information Turkey s 5 th largest private bank with USD 29.9 bn of assets* Highest capital adequacy ratio among peer group private banks at 18.7% Core Tier 1 ratio is at 13.8% (Million) Paid-in capital TRY 2,565 (USD 1,414) Shareholders equity TRY 7,407 (USD 4,084) * According to bank only data 4
Efficient branch network Comprehensive Turkish network covering 97% of GDP One of the youngest networks: 6.9 years average age Most productive among peers: TRY 39.4mn retail loans per branch 2009 2010 2011 2012 Corporate 8 4 4 4 4 Commercial 53 5 0 0 0 Retail 251 0 0 0 0 Consumer 99 1 0 0 0 Joint Branch 0 446 479 569 580 In-store 6 11 7 5 4 Collection points 41 32 29 0 0 Free Trade Zone 1 1 1 1 1 International 1 1 1 1 1 Mobile 1 1 1 1 1 Enpara 0 0 0 1 1 Total 461 502 522 582 592 Geographic footprint Top 5 Others No Presence Edirne (3) Kırklareli Tekirdağ (4) Çanakkale (2) Balıkesir (7) İzmir (40) Manisa (8) Aydın (6) Muğla (12) Istanbul Kastamonu (226) Zonguldak Kocaeli (3) Karabük Yalova (14) Düzce Sakarya (2) Bolu Çankırı (5) Bursa (24) Kütahya (2) Uşak (2) Bilecik (2) Eskişehir (5) Afyon (2) Denizli Isparta (6) (2) Burdur (2) Antalya (29) Bartın Ankara (60) Konya (10) Sinop Çorum Samsun (6) Kırıkkale Yozgat Kırşehir Amasya Tokat Kayseri (9) Nevşehir Aksaray Niğde Adana (15) Karaman Mersin (12) Osmaniye (2) Hatay (6) Ordu (3) Sivas Giresun Trabzon (4) Rize Bayburt Gümüşhane Erzincan Ardahan Artvin Kars Erzurum (2) Ağrı Tunceli Bingöl Muş Malatya Elâzığ (3) (2) Bitlis Diyarbakır K.Maraş (4) Batman Siirt (4) Adıyaman Mardin Gaziantep Urfa (2) Şırnak (9) (3) Kilis Iğdır Van Hakkâri 5
Strong presence in retail products Selected market shares 15 14 14.1% 14.2% 14.3% 14.2% Credit Card loans 13 12 11.8% 11 10 9 8 10.8% 7.9% 10.5% 8.5% 9.1% 8.3% 9.6% 7.9% 9.6% 7.7% Number of CC Mortgages 7 6 5.6% 6.2% 7.1% 7.0% General purpose loans 5 4 4.6% 3.9% 4.0% 4.5% 4.2% 4.4% Total deposits 3 2009 2010 2011 2012 6
Index NBG Group Finansbank overview Financials Macroeconomic indicators 7
financial highlights B/S Total assets stayed flat at TRY 54.3bn, while a slight asset switch took place from securities to loans Net loans increased 3%, mainly due to the increase in SME loans Market share in credit card loans leveled at 14.2%, maintaining Finansbank s position in the top 4 in the sector Customer deposits increased 2% mainly boosted by an increase in commercial deposits Approximately TRY 1bn of new bonds issued in the first quarter Shareholders equity increased 1%, helping maintain the CAR at 18.7% P&L Net interest income rose 32% to TRY 825mn when compared to Q1 12, while NIM expanded further to 725bps Net fees and commissions income increased 8% and reached TRY 260mn, indicating some normalization compared to last year s aggressive growth Operating expenses increased 29% mainly due to the addition of 70 new branches during the period Net income reached TRY 274mn, registering 33% growth compared to Q1 12 8
Solid financial performance 2012 USD million TRY million USD million TRY million B/S Total assets Securities Loans, net Customer deposits Funds borrowed Shareholders equity 30,518 4,101 20,640 17,881 4,626 4,109 54,402 7,310 36,793 31,874 8,247 7,325 29,929 3,634 20,985 17,963 4,463 4,084 54,282 6,590 38,060 32,580 8,095 7,407 Q1 12 USD million TRY million USD million TRY million P&L Net interest income Provisions Adjusted NII Net fees and commissions Opex Net Income 352 (80) 272 135 229 116 627 (143) 484 241 408 206 455 (108) 347 143 291 151 825 (196) 629 260 527 274 9
Loan driven business model with diversified funding Asset structure TRY million Funding structure TRY million 54,281 Due to banks 54,280 796 1% Cash and banks* 6,903 13% 32,580 60% Customer deposits Net loans 38,060 70% Securities issued 3,772 7% Wholesale funding 4,244 8% Securities 6,590 12% Other liabilities 3,805 Subordinated loan 1,676 7% 3% Fixed and other assets 2,728 5% Shareholders equity 7,407 14% * Including MMS 10
Focus on real banking Loans/Assets Net loans (TRY million) 72% 70% 68% 66% 67% 68% 70% 50,000 40,000 30,000 20,000 10,000 4.7% 30,838 +19% 4.9% 4.8% +3% 36,793 38,060 80% 60% 40% 20% % Loans Market share 64% 2011 2012 0 2011 2012 0% Securities breakdown Securities/Assets (TRY million) Trading AFS 1% 99% Floating Fixed CPI 38.5% 29.4% 32.1% 15,000 10,000 5,000 0 15% 6,949 931 6,018 2011 13% 7,310 1,309 6,001 2012 12% 6,590 1,082 5,508 16% 14% 12% 10% 8% 6% 4% Securities/ Total Assets FX TRY 11
Significant presence in high margin segments % CC + Consumer Loan breakdown Business segmentation (By annual turnover) Corporates > TRY 100mn Commercial companies TRY 10mn-100mn SME TRY 2mn-10mn Micro < TRY 2mn Commercial Corporate Credit Cards SME&Micro Consumer 62% 63% 64% 15% 9% 14% 8% 14% 7% 27% 14% 30% 15% 30% 15% 35% 33% 34% 2011 2012 Retail loans General purpose loans make up 40% of retail loans Auto Overdrafts General purpose 5% 2% 37% 6% 40% 1% 6% 1% 40% Mortgage loan growth slowing in line with the strategy of the Bank Mortgages 56% 53% 53% 2011 2012 12
Higher coverage for better risk management NPL provisioning TRY 661mn reserved in general provisions TRY 116mn in general provisions spared for possible loan losses Very limited loan write-off of TRY 6.5mn in 2011 and TRY 5.1mn in 2012 First time NPL sales of TRY 237mn in Sep 11, which lowered the NPL ratio by 0.5% 4,000 3,000 2,000 1,000 0 78% 73% 74% 78% 85% 83% 2,513 2,729 1,849 2011 2012 100% 80% 60% 40% 20% 0% % % of NPL s provisioned NPL (TRY 000) Private banks coverage ratio NPL trend NPL ratio by segments 12% 10% 8% 6% 9.2% 6.3% 7.0% 9.2% 9.4% 8.6% 15% 10% 5% 1.7% 5.7% 8.9% 4.2% 4.3% 6.1% 4.4% 1.5% 6.5% 8.9% 5.1% 6.8% 9.4% 6.6% 4.9% 5.3% 4.9% 2.7% 7% 6% 5% 4% 3% 2% 1% Corporate Commercial Credit cards Retail SME Total NPL ratio 4% 0% 0% Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 2011 2012 13
By type Growing deposit base By segment Retail deposits Corporate deposits 2012 31,874 60% 40% 2011 28,989 68% 32% +12% 39% 61% 32,580 +12% Time deposits Demand deposits 32,580 88% 12% 2012 31,874 89% 11% 2011 28,989 91% 9% TRY million Loans/Deposits 38,060 36,793 30,838 32,580 31,874 28,989 117% 115% 106% 0 10,000 20,000 30,000 40,000 50,000 0% 20% 40% 60% 80% 100% 120% 2012 2011 Loans/Deposits Loans Deposits 14
Strong capital and high liquidity Free funds (TRY million) RWA+Market risk+operational risk Total Tier I and Tier II capital CAR Capital adequacy ratio (TRY million) Free capital* Demand deposits 7,034 62% 38% 2011 +35% 9,052 63% 37% 2012 9,462 60% 40% 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 17.2% 43,071 7,399 2011 18.9% 46,797 8,856 2012 18.7% 48,904 9,150 20% 15% 10% 5% 0% Free capital / Assets 12% 11% 10.4% 10.5% 10% 9.4% 9% 8% 7% 2011 2012 The new Basel II compliance initially helped increase Finansbank s CAR by 110bps Core Tier 1 ratio is 13.8% * Free capital = Shareholders Equity (Subsidiaries + Fixed Assets + Unprovisioned NPL) 15
High margins with strong fee income growth Breakdown of interest income NIM evolution (bps) Q1 12 Securities Banks Securities Banks 7.6% 11.3% 0.2% 1.6% 800 750 700 650 600 608 671 725 87.1% Loans 92.2% Loans 550 500 2011 2012 Breakdown of net fee income (TRY million) 162 10% 6% 41% 22% 12% 8% +60% 241 6% 4% 40% 26% 8% 15% 260 4% 9% 44% 15% 11% 17% Non-cash loans Other banking commissions Credit Cards Acquiring Fees Insurance operations Deposit account maintenance fee Q1 11 Q1 12 16
TRY dominated balance sheet Currency breakdown; Assets Currency breakdown; Cash loans Currency breakdown; Deposits FX 18% 18% 19% FX 16% 13% 12% FX 27% 31% 32% TL 82% 82% 81% TL 84% 87% 88% TL 73% 69% 68% 2011 2012 2011 2012 2011 2012 Impact of TRY on asset profitability* 6.4% 9.0% 7.4% Margins on TL loans Margins on FX loans 1.7% 1.7% 2.3% 2011 2012 * Margins calculated by the deduction of last months time deposit rate from term-end loan book yield 17
Borrowings and issuances Type of borrowing Maturity Outstanding principal Million Tenor Years TRY Bond June 2013 TRY 650 0.5 TRY Bond September 2013 TRY 400 0.5 TRY Bond September 2013 TRY 475.8 0.5 Syndicated Term Loan USD Tranche November 2013 USD 188 1 Syndicated Term Loan EUR Tranche November 2013 EUR 212 1 TRY Bond April 2014 TRY 124.2 1 Eurobond May 2016 USD 500 5 EIB October 2017 EUR 64 7 Eurobond November 2017 USD 350 5 DPR Securitisation November 2017 USD 75 5 DPR Securitisation November 2017 EUR 10 5 Subordinated Debt from NBG October 2018 USD 325 10 Subordinated Debt from NBG October 2019 USD 200 10 EIB November 2019 USD 13 7 Subordinated Debt from NBG December 2019 USD 125 10 Subordinated Debt from NBG December 2021 USD 260 10 DPR Securitisation November 2024 EUR 50 12 Source: Finansbank (May 2013) 18
Index NBG Group Finansbank overview Financials Macroeconomic indicators 19
Key macroeconomic data 31.03.2013 31.12.2012 31.12.2011 USD/TRY 1.8103 1.7840 1.8909 EUR/TRY 2.3127 2.3547 2.4498 Central Bank Policy Rate 5.50% 5.50% 5.75% Nominal treasury bill interest rate (eop) 6.35% 6.16% 10.95% PPI 2.30% 2.45% 13.33% CPI 7.29% 6.16% 10.45% Consumer Confidence Index 74.90 73.59 N/A* USD (mn) GDP 786.293** 786,293 774,188 Exports (Goods), Y-o-Y 152,246 152,478 134,907 Imports (Goods), Y-o-Y (239,368) (236,545) (240,842) Trade Balance on Goods, Y-o-Y (85,122) (84,067) (105,935) Current Account Deficit, Y-o-Y 47,138 47,521 75,092 Primary Surplus (TRY mn), Y-t-D 14,251 19,625 24,774 Central Bank FX Reserves 105,650 100,320 78,330 TURKISH BANKING SYSTEM (TRY bn) 31.03.2013 31.12.2012 31.12.2011 Assets 1,427.7 1,370.7 1,217.7 Loans to Assets 58.38% 57.98% 56.08% Securities to Assets 18.95% 19.70% 23.40% *Turkstat renewed this index and new series is available only as of January 2012 **As GDP growth rate is not announced yet, this reflects 2012 number 20
Q1 00 Q3 00 Q1 01 Q3 01 Q1 02 Q3 02 Q1 03 Q3 03 Q1 04 Q3 04 Q1 05 Q3 05 Q1 06 Q3 06 Q1 07 Q3 07 Q1 08 Q3 08 Q1 09 Q3 09 Q1 10 Q3 10 Q1 11 Q3 11 Q1 12 Q3 12 Q4 12 Economic activity GDP growth rates 15% 10% 5% 0% 4Q rolling growth Quarterly growth -5% -10% -15% Turkish economy went through a rebalancing period in 2012 as domestic demand weakened considerably on the back of the tight monetary conditions during the first half of the year. Consequently, GDP growth slowed down to 2.2% in 2012, from 8.8% in 2011 Regarding 2013, we see GDP growth rate increasing to 5.3%, higher than the official target at 4%, as domestic demand is on the recovery trend and external financing conditions have improved thanks to rating upgrades and loose global liquidity conditions 21
Debt outlook 77.9 74.0 67.7 Debt/GDP (EU Def n, %) 59.6 52.7 46.5 39.9 40.0 46.1 42.2 39.1 36.1 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Thanks to strong economic growth and commitment to fiscal discipline, gross public debt burden declined from a peak of 77.9% to 39.9% as of end-2007. Yet, global economic crisis weighed on debt outlook with gross public debt to GDP ratio beginning to increase in 2008 and ending 2009 at 46.1%. However, this trend has reversed in 2010, and debt burden eased down to 39.4% in 2011 and 36.1% in 2012 22
Jul 08 Sep 08 Dec 08 Mar 09 Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Apr 13 Inflation outlook 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% CPI (YoY) PPI (YoY) Ending 2011 at 10.45%, annual inflation remained at double digits in the first 4 months of 2012 and hit a recent high at 11.14% in April, before it trended downward on the back of the benign course in food prices and eased to 6.16% at the year-end Headline CPI eased to 6.13% in April, after hovering slightly above 7% in 1Q 2013. We see annual CPI ending this year at 6.5% while CBRT s projection stands at 5.3% 23
Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 May-13 Monetary policy 24 22 20 18 16 14 12 10 8 6 4 2 Benchmark yield (%) Policy rate (compound, %) CBRT implemented additional monetary tightening measures to contain deterioration in pricing behaviour and inflation expectations during 1H 2012. Yet, as inflation outlook improved and economic activity followed a mild trend, CBRT eased funding conditions of banks by letting the effective funding rate decline to 5.60% in December, from 2Q average at 9.23% CBRT s policy stance has been characterized by «low short term interest rates and tight macroprudential conditions» especially since November when Fitch upgraded Turkey to IG, in order to contain the unfavorable impacts of strong capital flows on credit growth and current account deficit. As such, in addition to cuts in the interest rate corridor, CBRT cut policy rate (1-week repo rate) by 125 bps to 4.5% during December 12 May 13 period while hiking RRRs and ROCs 24
Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Credit growth 45% 40% 35% 30% 25% 20% TRY loans Total loans 15% 10% 5% 0% -5% Authorities have been monitoring loan growth very closely after a rapid acceleration in 2010. In addition to CBRT s policy mix that includes substantial increases in RRRs and regulatory measures from BRSA curbed the rapid pace of growth in loans to 28.2% in 2011 After following a downward trend during first three quarters of 2012 on the back of the tight monetary conditions during 1H and slowdown in economic activity, credit growth started to accelerate in the final quarter and ended last year with a YoY growth rate of 18%. Currently, annualized credit growth rate hovers above 20% and we see 2013 YoY credit growth exceeding CBRT s projection at 15% 25
Jan 01 Jul 01 Jan 02 Jul 02 Jan 03 Jul 03 Jan 04 Jul 04 Jan 05 Jul 05 Jan 06 Jul 06 Jan 07 Jul 07 Jan 08 Jul 08 Jan 09 Jul 09 Jan 10 Jul 10 Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 Mar 13 External balance TRY million 10,000 0-10,000-20,000-30,000-40,000-50,000-60,000-70,000-80,000-90,000-100,000-110,000 CA balance Trade balance Thanks to the rebalancing in economy during last year and favourable contribution of gold exports CA deficit / GDP narrowed to 6% in 2012, down from 10% at the end of 2011. Cumulative current account followed a somewhat flat trend in the 1Q of 2013 Yet, in our view the benign course in external balance has ended. Going forward, we see current account deficit widening to 7.9% of GDP in 2013, on the back of the recovery in domestic demand 26
Disclaimer Finansbank A.Ş. (the Bank ) has prepared this Presentation for the sole purposes of providing information which include forward looking projections and statements relating to the Bank (the Information ). No representation or warranty is made by the Bank for the accuracy or completeness of the Information contained herein. The Information is subject to change without any notice. Neither the Presentation nor the Information can construe any investment advise, or an offer to buy or sell the Bank s shares. This Presentation and/or the Information cannot be copied, disclosed or distributed to any person other than the person to whom the Presentation and/or Information delivered or sent by the Bank or who required a copy of the same from the Bank. Finansbank A.Ş. expressly disclaims any and all liability for any statements including any forward looking projections and statements, expressed, implied, contained herein, or for any omissions from Information or any other written or oral communication transmitted or made available 27